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Theory of Change: How Volunteers of America made change a part of its mission

MUSE
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October 17, 2013

Mary Beth Jameson

If you want your strategic plan to be successful, a great place to start is with a Theory of Change. Often referred to simply as "TOC," it is a tool that helps strategic planners identify, organize and map all the components needed to bring about the desired changes. The concept originated in academia as a social science theory, and gradually has been adopted as a strategic planning tool by many not-for-profit organizations. These adopters have found it to be an exceptionally valuable tool for managing the process of change.

One enthusiastic adopter is Volunteers of America - Minnesota (VOA-MN). One of the nation's largest and most comprehensive health and human services organizations, it has over a century of experience serving the state's most vulnerable people. The faith-based organization serves older adults, veterans, at-risk youth, ex-offenders from the justice system, homeless people, disabled individuals and those recovering from addictions.

In search of a strategy

VOA-MN has also experienced exceptionally strong growth, going from approximately $10 million to $42 million in revenue in only ten years. Because much of the growth has come through merger and acquisition, the organization's structure is multifaceted and at times, unwieldy. It is comprised of many different entities, each with its own distinct perspective. In addition to this complexity, the organization did not have significant experience with strategic planning, and no experience at all with the TOC concept. With funding from the Kresge Foundation, the organization created the position of Vice President of Strategy and Operations. Jim Bettendorf was chosen to assume this role, and along with recently hired President and Chief Executive Officer Paula Hart, became a prime mover of the TOC initiative.

VOA embarks on a journey of discovery

This was the start of what Bettendorf refers to as VOA-MN's "journey of discovery," a fresh examination of the enterprise that would eventually provide more insight and information about the organization than ever existed. Recognizing the need to examine the quality of the programs and services, the team started with a Baldridge Assessment, and from that, they identified several opportunities for improvement. Next, they reviewed the mission statement. It was somewhat cumbersome and verbose, few staff members were familiar with it and even fewer could say it out loud. This was an invitation to rewrite it, which they did – making it short, powerful and to the point.

Next, the team conducted an engagement survey, which solicited employees for their suggestions about the company and its mission. This survey, the organization's first, yielded valuable insights from an employee perspective. The team then initiated a review of the eight service lines, with the objective of taking a deeper look at the 60 different programs, with special attention to how each was managed and operated. "We asked a lot of questions that no one had ever asked before, including asking about the competitive environment and exit strategy of each program," says Bettendorf.

But when they did three-year and five-year financial projections, they found serious margin problems. Seeking the source of the margin erosion, they developed a Mission Money Matrix, which is a one-page breakdown showing each program's alignment with VOA-MN's mission, as well as its relative margin. "It gave us a governance tool and helped us to see which areas needed margin improvement," says Bettendorf.

Theory of Change enters the picture

In this context, one of VOA-MN's fundraising staff was asked by a potential funder about the organization's Theory of Change. This question set in motion a review of the process, and the idea soon took hold with senior managers. Essentially, TOC describes how an organization creates social change, i.e., how it uses funding, staff and volunteers to do things that result in changes to their clients' lives. Hart and Bettendorf concluded that it might work for their organization. TOC seemed to be asking the right type of questions, would involve all parts of the organization and would give VOA-MN an opportunity to look beyond the service line reviews.

"We hoped it would help us to understand what our staff was truly trying to accomplish in their daily work, not just what they're contracted to do," says Bettendorf, and in the process, "we hoped it would help us to discover who and what we are as an organization." Bettendorf and Hart worked with RSM to facilitate eight meetings, one for each service line. Representatives from all levels of the organization participated in the sessions. The sessions were each four hours long, and both Hart and Bettendorf were present at all of them. Among the questions posed to the group were:

What is the issue you want to address?

What are the underlying causes of the issue?

What would a solution look like?

Who would be impacted by the solution?

What resources do you need to solve the problem?

What resources do you already have?

Who else is working in this field, and can or should you partner with them?

How will you measure success?

An eye opening experience

One session brought together the employees who manage public housing facilities with employees who advocate for public housing residents. Having these two groups meet to share views was an unprecedented event, since they can sometimes have conflicting interests, and even work in opposition to one another. In fact, the two groups had never been in the same room together. "It was an eye-opening experience to see how each person really felt about their programs," says Bettendorf. "I go to meetings all the time where they talk about change, but change never happens. But at the TOC meetings, I felt I was actually seeing change happen right there," commented Hart about experiencing the TOC sessions.

The sessions also gave senior managers new information and insight into the day-to-day realities of working in the organization, including a better sense of what workers are facing and their special challenges. For example, the teams discussed very specific examples of the emotional and physical challenges that employees face in their work, as well as ways to help cope with those challenges. It also provided managers with a deeper perspective on the very different needs of the people they serve, which could include anyone, from juveniles in the justice system, sex offenders, grandmothers in assisted living, homeless people and people who simply need an inexpensive meal.

Harvesting the insights into the strategic plan

In synthesizing information from across the eight service lines, the team realized many distinct benefits for the organization. For them, it was not just a business improvement or a fundraising improvement tool. It also offered real operational insights. For example, with respect to one federal grant that provided funding to integrate ex-offenders into society, managers discussed how their services aligned with the goals stated in the federal contract. The contract required that a high percentage of ex-offenders complete their 90-day program. Yet merely completing the program and meeting federal goals offered no insight into whether these people were successfully reintegrating into society over the long term. What VOA needed was its own set of measurement tools to track its clients' readjustment to the community over an extended period of time. "We were trying to really make a difference in these people's lives," says Bettendorf.

In the end, the goal was to bring the different perspectives together, and incorporate them into the organization's strategic plan. Senior management could then use the harvested information as a tool for governance. Additionally, each individual department manager walked away with a list of the strategies identified for their area. The managers could then use the information to help formulate their operating plans.

Using TOC in strategic planning, however, is not a one-time event; nor does it yield permanent directives or fixed truths. Rather, it is an ongoing process of review and evaluation within an organization. The information gathered during any one session has a limited shelf life and will require periodic reevaluations. "It's important that not-for-profit organizations get to a place where they are planning for the future and not reacting to the present," notes Bettendorf. This is especially true in view of the upcoming changes expected with the Accountable Care Act. "We need to be ready for all these changes."

For more information

For more information on how Theory of Change and strategic planning can help your organization, please contact Mary Beth Jameson, Director, Performance Improvement Consulting Services, at 612.629.9683.

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